4 Major Costs of Delayed Succession Planning

Gaining value from a closely held business is not guaranteed even if it is successful. Owners must spend time mapping out their exit plan with key employees and experienced advisors. If they don’t consider their options 10 or 15 years before a planned exit, they risk losing more than just money.

Owners don’t have to worry about a specific exit date. The important thing is to decide whether or not they want the business to continue beyond them and, if so, will it have enough value to provide the owners with a comfortable exit?

In the following video, Long Island CPA and Partner Thomas P. Terry shares four major costs of delayed succession planning that are too real for any closely held business owner. Early planning can help you manage all of them.

Consider these questions when planning your exit:

What is the value of my business now, and is it enough to support my exit

Which leaders or family members need to stay in the loop about the exit strategy and who doesn’t need to know?

Could I consider an outside buyer or an ESOP?

What is plan B or C if I need to move up the date of my exit?

What documents should be in place to protect the business during a transition?

Should I consider a change in entity structure before my exit?
What is my vision of life after the exit?